How Much is Too Much to Spend on Gifts?

For some reason the point of every birthday, anniversary and Christmas in our family, was to out due the last one.

We didn’t purposefully set out to make each gift even bigger and better (and more expensive) than the last, it just evolved.

It finally came to a head when it took several hours to get through all the gift unwrapping hullabaloo.

It was absolutely ridiculous.

So now, when I’m searching for a nice gift, I feel like I’m not spending enough money.

Maybe it’s because the prices are going up, and it’s hard to purchase the best gift for $10-20. Or maybe it’s because of peer pressure, commercials and the industry as a whole.

So, how much is too much to spend on gifts? 

Option 1: Setting a flat price limit

I personally try to stay within a certain monthly spending limit for buying gifts. If it’s one of my friends or family’s special birthdays (like turning 21 or 30) I might spend a little more.

The problem with the flat price method is that $40 could be chump change for one person, and a whole week’s worth of groceries to another.

Option 2: Using a percentage

The percentage option I like because it takes into account each person’s income and their discretionary spending. For the whole year, I spend just over 2.5% of my net income for gifts and presents. I’m not sure if that is too much money, or too little.

Option 3: Only buy what’s affordable

Thankfully I have a pretty steady income from month to month, but sometimes that income can vary. Sometime’s I’m able to afford more expensive gifts, and other month’s not as much.

However, if I don’t spend enough on one friend but more on the other, they get jealous or upset. And if I spend a flat amount on everyone, they think I’m being cheap or taking the easy way out.

Option 4: Decide on a case by case basis

This option let’s you have the most control. You can determine the value of the gift based on each situation. If the present is for a close friend, a child or your parents, you can adjust the budget accordingly. Children are easy to please since they want toys, games or a new DVD, but adults come with all kinds of expectations.

Option 5: Buy everyone a gift card and be done with it

Seriously! Who doesn’t love a Target or Starbucks gift card? If you don’t like a specific gift card you can always sell it on eBay, PlasticJungle, or exchange with a friend for some cash.

Christina from Northern Cheapskate says it best:
“Give from the heart, not your wallet. ”

While I’m all about staying within a reasonable spending plan, I do like to break the rules. I hate buying or rejecting gifts, based solely on the price.

If you find something that’s affordable that your friend will love, I don’t think you should feel guilty if you spend too little or too much money.

How do you solve this dilemma?

Photo Credit: jollyUK